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  • 1NON REVIEWED INFORMATION3rd Quarter 2014__

    Conference Call / WebcastJanuary 29th 2015

  • 2DISCLAIMER

    FORWARD-LOOKING STATEMENTS:

    DISCLAIMER

    This presentation includes forward-looking statements within the meaningof Section 27A of the Securities Act of 1933, as amended, and Section 21Eof the Securities Exchange Act of 1934, as amended, that are subject torisks and uncertainties. The forward-looking statements, which address theCompanys expected business and financial performance, among othermatters, contain words such as believe, expect, estimate, anticipate,optimistic, intend, plan, aim, will, may, should, could, would,likely, and similar expressions. Readers are cautioned not to place unduereliance on these forward-looking statements, which speak only as of thedate on which they are made. There is no assurance that the expectedevents, trends or results will actually occur. We undertake no obligation topublicly update or revise any forward-looking statements, whether as aresult of new information or future events or for any other reason. TheCompanys actual results could differ materially from those expressed orforecast in any forward-looking statements as a result of a variety ofassumptions and factors. These factors include, but are not limited to, thefollowing: (i) failure to comply with laws or regulations, including fraudulentactivity, corruption, and bribery; (ii) the outcome of ongoing corruptioninvestigations and any new facts or information that may arise in relation tothe Lava Jato Operation; (iii) the effectiveness of the Companys riskmanagement policies and procedures, including operational risk; and (iv)litigation, such as class actions or proceedings brought by governmentaland regulatory agencies.

    A description of other factors can be found in the Companys AnnualReport on Form 20-F for the year ended December 31, 2013, and theCompanys other filings with the U.S. Securities and ExchangeCommission.

    NON-SEC COMPLIANT OIL AND GAS RESERVES:

    CAUTIONARY STATEMENT FOR US INVESTORS

    We present certain data in this presentation, such as oil and gasresources, that we are not permitted to present in documents filed withthe United States Securities and Exchange Commission (SEC) undernew Subpart 1200 to Regulation S-K because such terms do notqualify as proved, probable or possible reserves under Rule 4-10(a) ofRegulation S-X.

  • 3Background: Lava Jato Operation and Investigations

    Lava JatoOperation

    conducted by the Federal

    Police

    Mar/14Oct/14

    Need to postpone the release of the

    Financial Statements

    Nov/14Dec/14

    Lava Jato Operation reached Petrobras in March 2014 through the arrest of thecompanys former Downstream Director, Paulo Roberto Costa, on charges of corruption,embezzlement, among other offenses.

    When the Company filed its 2013 and first half 2014 annual financial statements, there wasno evidence available that would have affected the conclusions of the Company or theindependent auditors regarding the financial statements;

    Beginning on October 8, 2014, depositions of former Director, Paulo Roberto Costa, andother investigation targets were made public, mentioning cartelization, exceeding pricesand bribery.

    With these investigations, Petrobras was not able to release the reviewed 3Q14 financialstatements, due to the time needed to:

    gain greater understanding from the ongoing internal investigations led by independent lawfirms;

    make any necessary adjustments to the financial statements.

  • 4 The depositions to which Petrobras had access as borrowed evidence identify a list ofsuppliers and contractors involved in the alleged misconduct and state that the improperpayments averaged 3% of the total price of the contracts involved;

    The information currently available to the Company indicates that contracts entered intobetween January 1, 2004 and April 30, 2012 with the companies named in the depositionsmay have included amounts related to the misconduct;

    LIMITATION: The Company cant correctly determine either the amount or the period whenthese payments were made, because the misconduct involves payments made by externalsuppliers and cannot be traced back to the companys accounting records.

    Need to Rectify the Error (IAS-8):Values improperly recognized in the Companys PP&E due to corruption

    Available Information

    Given this limitation and the need to rectify the error (values improperly recognized in PP&E), the Company considered two approaches to try to quantify them.

  • 5Methodology 1 Average Percentage of Improper Payments

    Estimation of the magnitude of the error using the average percentage mentioned in the depositions (3%)

    The Company identified the amounts paid from 2004 to September 2014 with respect to the contracts signedbetween Petrobras and the groups of companies mentioned in the depositions (either in isolation or as a part of aconsortium) from 01/01/2004 to 04/30/2012.

    Considering this scope of contracts and respective amendments, the Company applied the following approach:

    i. Applying an average percentage of 3%, considering this the percentage of improper payments whichincreased the amounts charged to the Company;

    ii. The use of specific amounts of improper payments mentioned in the depositions.

    The potential effect of using this approach would be an estimated loss of R$ 4.06 billion.

    Additional information regarding the ongoing investigations could result in:

    a.) further adjustments;b.) expansion of the scope for contracts and companies;c.) period of analysis.

  • 6Methodology 2 Fair Value of Specified Assets (1/3)Concept and Approach

    Two approaches: (1) cost approach, considering the replacement cost; or (2) income approach, considering the discounted cash flows;

    The fair value of the assets was measured on a standalone and independent basis (excluding synergies Petrobras may have due to its integrated operation), in order to determine the value of these assets from the perspective of third parties (market view).

    Book Value (-) Fair Value = Correction Value

  • 7 Evaluation carried out by global firms internationally recognized as independent evaluators; 52 assets under construction or in operation were selected that amounted R$ 188 billion, 1/3 of the companys total fixed

    assets (R$ 600 billion); The analysis of 19% was conducted by the technical teams of Petrobras, employing full methodological consistency and

    the same assumptions as the work carried out by the independent evaluators.

    129.0

    Others*

    120.0

    9.0

    PP&E related to the companies named as part of

    the cartel

    Contracts signed between 2004 and Apr/12

    R$ billion

    These R$ 120 billion are included in the R$ 188,4 billion of evaluated assets

    411.7Not Evaluated

    188.4 Evaluated**

    600.1

    Consolidated PP&E

    * Fixed assets with contracts in Lava Jato Operation without economic-financial evaluation represent a high amount of assets of various nature with non material individual book value ** considers non-Petrobras portion of Tupi BV (R$ 3.6 billion).

    81%

    19%

    Independent Evaluators

    Petrobras

    R$ 188.4 billion 52 assets

    24 assetsR$ 152.8 bi

    28 assetsR$ 35.6 bi

    R$ billion

    Methodology 2 Fair Value of Specified Assets (2/3)52 Assets Selected

    Contracts forEvaluation

  • 8The difference should be understood as being comprised of several components of different natures, being impossible to quantify them individually, as for example:

    changes in price and margin projections of inputs

    changes in price, margin and demand projections of traded products

    changes in equipment prices, inputs, wages and other correlated costs

    deficiencies in project planning (engineering and supply)

    contracting made before the conclusion of the basic project

    changes in economic/financial variables, such as exchange and discount rate, risk indicators and cost of capital

    Fair Value of the assets lower than book value Fair Value of the assets higher than book value

    31 assetsEstimated Amount: - R$ 88.6 billion

    21 assetsEstimated Amount: + R$ 27.2 billion

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    Methodology 2 Fair Value of Specified Assets (3/3)Results and Weakness

    contractual clauses inappropriate to changes in scope: term and value amendments

    delays and inefficiency in the execution of constructions, also because of environmental conditions

    cartelization of suppliers: corruption and overcharging

  • 9 The comparison between the fair value and the book value does not isolate theamount related to corruption and therefore is not an adequate proxy;

    We have decided not to use the methodology of determining the fair value as aproxy to adjust the companys fixed assets due to fraud and corruption, becausethis adjustment would include elements with no direct relation with the unlawfulpayments;

    We will give proper treatment to the information contained in the report of theindependent appraisers (fair value calculation), in order to adjust the book value ofthe assets of the Company, if necessary;

    We are going to further examine another methodology that takes into accountvalues, deadlines and information from the depositions, in compliance with therequirements of the regulators (CVM and SEC), aimed at releasing the financialstatements reviewed as soon as possible.

    Conclusion and Next Steps

    Petrobrass cash position or operating cash flow is not affected by any adjustments arising from corruption or